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PQ backtracks on plan to abolish health tax

The Canadian Press
Published Wednesday, October 10, 2012 4:13PM EDT
Last Updated Wednesday, October 10, 2012 7:31PM EDT

QUEBEC -- The Parti Quebecois government's minority status has forced it to backtrack on a major campaign promise.

The PQ had promised to abolish an annual $200 health tax paid by all Quebecers.

But Finance Minister Nicolas Marceau said Wednesday the tax will vary on a sliding scale, depending on income.

"I agree that we're not relieving (the burden) on the middle class as much as we wanted to," Marceau told a news conference.

"We can't go much further given the government's minority situation."

The PQ won 54 seats in the 125-seat national assembly in last month's election, four more than the Liberals who introduced the health tax a few years ago. The Coalition for Quebec's Future won 19 seats.

Both Opposition parties were opposed to the abolition of the tax.

"We want to be a government that listens," said Marceau.

Under Marceau's new proposal, someone earning between $18,000 and $42,000 will pay a health tax of between $1 and $199, while those earning between $42,000 and $130,000 will continue to pay $200.

The tax goes up for those who earn more, hitting a maximum of $1,000 for individuals earning more than $150,000.

The new measures will kick in for the year 2013 when Quebecers send in their tax returns in the spring of 2014.

Former Liberal finance minister Raymond Bachand accused the PQ of not being transparent during the election campaign.

"This was one of their major campaign promises and today Quebec voters have been betrayed," said Bachand, one of three candidates in the race to succeed Jean Charest as Liberal leader.

"I had voters come up to me and tell me they didn't vote for me because of the health tax."

Marceau said the new system will mean four million taxpayers won't pay any health tax whatsoever or will see their contribution reduced as of 2013.

Quebec is also hiking the income tax rate for people who earn $100,000.

Quebec has decided to not increase the capital gains tax. It has also abandoned plans to reduce a tax credit on dividends.

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Photos

Quebec Finance Minister Nicolas Marceau speaks during a news conference in Montreal, Friday, October 5, 2012, where he outlined the current state of Quebec's finances. THE CANADIAN PRESS/Graham Hughes.